New Delhi, Sep 14 - India and Sri Lanka are expected to sign a new economic agreement next year covering both goods and services, said the island nation's Minister of Investment Promotion Navin Dissanayake.

Discussions are expected to iron out differences, paving the way for the signing of an expanded Comprehensive Economic Partnership Agreement before 2011, said the visiting Sri Lankan minister.

He, however, noted that Sri Lankan business groups were worried over Indian dominance in the services sector.

At a seminar organised by the Confederation of Indian Industry here, Dissanayake made a strong pitch for Indian industry to come to the island nation, which is recovering after the end of a decades old civil war.